• Equities are, overall, struggling for clear direction in relatively cautious trade going into ECB; Euro Stoxx 50 -0.5%
• Bourses, and US futures, were lifted amid further constructive China tech developments, this time for Ant; albeit, we have drifted modestly off best since, ES +0.3%
• DXY remains in proximity to 152.00 and within yesterday’s parameters amid JPY and Yuan upside while EUR lies between sizeable OpEx
• Core debt is choppy but Bunds have steadied near U/C alongside USTs pre-ECB and long-bond supply respectively
• WTI and Brent are steady after giving up overnight gains with participants cautious and cognizant of China's fluid COVID situation; amid fresh restrictions being announced
• Looking ahead, highlights include US IJC, ECB Policy Announcement/Press Conference, and Supply from US (30yr)

As of 11:15BST/06:15ET

LOOKING AHEAD

• US IJC, ECB Policy Announcement/Press Conference, Supply from US (30yr).
• Click here for the Week Ahead preview

GEOPOLITICS

• Russian Duma member Delimkhanov said he hopes the war is going to be over by the end of the year, according to Nexta.
• Russia's Kremlin says no agreement was reached with Turkey on Ukrainian grain, work continues, via Reuters.
• G7 officials are said to be mulling setting price caps on Russian oil via insurers, according to WSJ sources.
• IAEA Chief Grossi will hold a press conference on Iran at 12:15BST/07:15EDT; Al Jazeera reports Grossi saying that Iran has removed 20 cameras and other surveillance equipment belonging to the IAEA, according to a diplomatic source.

EUROPEAN TRADE

CENTRAL BANKS

• Riksbank's Breman says she will support doing what is required to attain the inflation target, including more hikes than are currently in the path; adding, to control inflation back to target, need to act now. Does not exclude a 50bps hike at the next meeting.
• Hungarian Finance Minister says the Hungary has issued FX bonds totalling USD 3bln and EUR 750mln; follows the NBH maintaining its one-week deposit rate at 6.75%.

EQUITIES

• Equities are, overall, struggling for clear direction in relatively cautious trade going into ECB; Euro Stoxx 50 -0.5%.
• Bourses, and US futures, were lifted amid further constructive China tech developments, this time for Ant Group; albeit, we have drifted modestly off best since, ES +0.3%.
• China is said to be mulling reviving Jack Ma's Ant IPO, with reports framing it as an easing in crackdowns from China, according to Bloomberg sources. *Click here for analysis/reaction.
• China PCA Retail Passenger Vehicle Sales (May): -17.3% YY; Tesla (TSLA) 32.2k (prev. 33.5k YY)
• Walgreens Boots Alliance's (WBA) Boots has received a non-binding bid from Apollo Global Management and Reliance Industries, according to FT sources.
• Click here for more detail.

FX

• Yen finally finds some friends amidst less hostile yield environment and supportive risk backdrop; USD/JPY retreats just over 100 pips around 134.00 and EUR/JPY almost 150 pips from 144.00+ peak.
• DXY remains anchored around 102.500 ahead of Friday’s US CPI data and as Euro pivots 1.0700 pre-ECB; EUR/USD flanked by decent option expiries as well from 1.0750-55 to 1.0605-00 on the downside.
• Kiwi underpinned after RBNZ outlines schedule for balance sheet rundown; NZD/USD hovers near 0.6450, AUD/NZD sub-1.1150 with AUD/USD capped into 0.7200.
• Rand continues bull run with extra incentive from wider than forecast SA current account surplus, USD/ZAR straddling 15.2500.
• Lira rout resumes following fleeting respite on prospect of capital controls raised by S&P, USD/TRY above 17.2200.
• Yuan retains bulk of Chinese trade data related gains even though parts of Beijing and Shanghai reimpose restrictive Covid measures; USD/CNH closer to 6.6700 than 6.7100, USD/CNY settles sub-6.7000 vs circa 6.7000 high.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0600-05 (1.03BN), 1.0620-25 (288M), 1.0650 (258M), 1.0750-55 (1.06BN), 1.0800 (294M)
• Click here for more detail.

FIXED INCOME

• Bunds choppy and lagging Eurozone periphery within 149.17-148.52 range pre-ECB, as focus falls on fragmentation along with rate and QE guidance
• Gilts underperforming between 114.86-42 parameters as BoE tightening expectations rise and drag Sonia strip down
• US Treasuries flat-lining ahead of jobless claims and long bond supply, with 10 year T-note just above par inside tight 118-07/117-26+ band
• Click here for more detail.

COMMODITIES

• WTI and Brent are steady after giving up overnight gains with participants cautious and cognizant of China's fluid COVID situation.
• Currently, the benchmarks are sub-USD 122/bbl and USD 123.50/bbl respectively, vs highs of 122.72 and 124.34.
• Magnitude 5.6 earthquake hits the Antofagasta region in Chile, according to EMSC.
• Spot gold is sub-USD1850/oz, having slipped below its falling 10-DMA but holding above the overlapping 200- & 21-DMAs at USD 1842/oz.
• Click here for more detail.

NOTABLE US HEADLINES

• US House passed the gun bill to raise the assault rifle purchase age to 21 although the plan faces long odds in the Senate, according to CNBC.
• Click here for the US Early Morning note.

CRYPTO

• Bitcoin is once again rangebound and in proximity to the USD 30k mark, with newsflow limited and attention focused on broader risk events.

APAC TRADE

EQUITIES

• APAC stocks were subdued following a weak handover from the US and with sentiment cautious.
• ASX 200 was pressured by underperformance in the top-weighted financials sector and weakness in property-related stocks also suffering amid expectations of aggressive RBA rate hikes which increases banks’ funding costs and could threaten the quality of their loan portfolios.
• Nikkei 225 kept afloat as participants contemplated the ramifications of further currency depreciation.
• Hang Seng and Shanghai Comp. were lacklustre despite the mostly better than expected Chinese trade data as some COVID concerns resurfaced in Shanghai with the city locking down the Minhang district on Saturday morning for mass COVID testing.

NOTABLE APAC HEADLINES

• Shanghai will lockdown the Minhang district on Saturday morning for mass COVID-19 testing, according to Bloomberg; additionally, Beijing's Chaoyang district is to close all entertainment venues from 14:00 local time (07:00BST) for COVID containment.
• US Treasury Secretary Yellen said China is guilty of unfair trade practices but some tariffs on Chinese goods do not serve US strategic interests and the Biden administration is looking to reconfigure tariffs in a way that would be more strategic, according to Bloomberg.
• Japan is planning to expand its prefectural travel subsidies across the entire country, according to Yomiuri.
• RBNZ outlined plans to sell New Zealand government bonds from July 2022 in which it intends to offload NZD 5bln per fiscal year in order of maturity date until its LSAP holdings are reduced to zero, according to Reuters.

NOTABLE APAC DATA

• Chinese Trade Balance (USD) (May) 78.76B vs. Exp. 58.0B (Prev. 51.12B)
• Chinese Exports YY (USD) (May) 16.9% vs. Exp. 8.0% (Prev. 3.9%); Imports YY (USD)(May) 4.1% vs. Exp. 2.0% (Prev. 0.0%)
• Chinese Trade Balance (CNY) (May) 502.9B vs. Exp. 400.0B (Prev. 325.1B)
• Chinese Exports YY (CNY) (May) 15.3 vs. Exp. 9.2% (Prev. 1.9%); Imports YY (CNY) (May) 2.8% vs. Exp. 4.2% (Prev. -2.0%)